Just when you thought that the humble British banks may have realised the error of their ways, along come more signs that they still don't get it. Their reckless gambling with our money created a deep recession and deficit that threatens the destruction of vital public services across the country. Yet the audacity of some of our senior bankers remains perfectly intact. Not content with arguing against structural reforms, some are now threatening to raise charges on customers and end services that are currently free.

John Varley, chief executive of Barclays, told the Commission on Banking meeting this week, "it is possible that free-if-in-credit banking is a structure that has outlived its time" and that such services to depositors are "idiosyncratic". But customers who lend their savings to the banks are giving these institutions the privilege to use their deposits to invest – and allowing the banks to make a tidy profit as a result. Banks have never lost out because of their gracious generosity in allowing customers to use cheque books, debit cards or cash machines for free. When they've tried over the years to encroach on these services, customer outrage (for instance at charging for cash withdrawals) has largely beaten them back.

The prospect of an end to free banking would be a major slap in the face for the majority of loyal customers, millions of whom have already paid to bailout the banking system with taxpayer-funded loans, guarantees and capital injections. The banks benefited from a near-£1tn support package during the credit crunch, and they still have a long way to go if they are to regain the trust and confidence of the British public. Even those banks, such as Barclays, who didn't directly require the taxpayer to buy their shares have implicitly been propped up by the knowledge that the government would not allow them to collapse.

If anything, banks should be moving towards a better deal for customers, not tightening their grip. Customers slipping into unauthorised overdrafts are clobbered hard, with high interest plus fees and penalties that average a 167% charge. Many customers have noticed that mortgage rates haven't fallen as fast as the base rate. The Bank of England itself has acknowledged that high-street bankers are stealthily raising their profit margins on customers, arguing in their quarterly bulletins that interest rate changes compared to pre-recession times are substantially due to "mark-ups"; from a 0.5% spread on a typical tracker mortgage to 3.2% today and from 4% to 10% on personal loans.

Apparently Varley is using his role at Barclays to spearhead a charm offensive on behalf of the banking community known as Project Merlin, which has been described as a "reputational salvage operation" intending to bestow good deeds across the land with money for environmental projects and the prime minister's cherished "big society bank". But charging customers to use day-to-day banking services even when in credit would be a distinctly charmless act.